Energy

India Temporarily Shelves Privatizing Coal Industry — Cites Slacking Demand

( REUTERS/Jason Lee)

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Chris White Tech Reporter
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India will temporarily halt plans to privatize its coal industry, thanks in part to dwindling demand for the fossil fuel, a government official told Reuters Monday.

India’s government wants its private sector to contribute about 1.5 billion tons of coal to the country’s coal industry by 2020, but the move to bring privatization to a halt might hurt the country’s ability to meet its coal production goals.

“We’re reasonably confident that (the reforms) will help raise demand,” Coal Secretary Anil Swarup told Reuters. “We are ready, but there would be a little delay in opening up for private companies.”

India’s government-run Coal India has dialed up its coal production to record levels. Despite the ramp up in production, private companies are not purchasing coal at high enough levels.

Swarup, who initially set up the privatization plan, said the country has already etched out several mines to auction once the beleaguered market begins to turn around.

While India intends on going through with its privatizing plan, there is a possibility that international coal companies — such as Rio Tinto, BHP Billiton, and Peabody Energy — may stay away from India, due in part to the difficulty with getting production permits.

Slacking demand for coal has also forced India’s neighbor, China, into firing nearly 1.8 million workers, or nearly 15 percent of China’s coal and steel industry. Specifically, the cuts will end up costing 1.3 million coal workers their jobs, with another 500,000 workers from China’s steel industry. China’s coal and steel industries currently employ roughly 12 million people, according to Reuters.

“This involves the resettlement of a total of 1.8 million workers,” Yin Weimin, the minister for human resources and social security said at a news conference in February. “This task will be very difficult, but we are still very confident.”

Weimin added: “The economy faces relatively big downward pressures and some firms face difficulties in production and operation, which would lead to insufficient employment.”

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